§ 18. Mr. Gordon Campbellasked the Minister of Technology whether the Government's review of the present system of investment grants has been completed; and if he will make a statement.
§ The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Neil Carmichael)The Department is now obtaining information from industry as part of the study of the effectiveness of investment grants, which I hope will be completed by the end of the year.
§ Mr. CampbellAs there is concern on both sides of the House that the system of grants for development should be made more effective—not abolished, as is sometimes incorrectly ascribed to us, as by the Minister just now—will the review not only be completed before the end of the year, but will any part of it be completed before the Budget?
§ Mr. CarmichaelMy hon. Friend the Minister of State said earlier that the report would be completed, we hope, just before the end of the year. The question of publication will be considered then.
§ Mr. Kenneth BakerWhat estimate has the Minister made of the cost of investment grants for the next financial 11 year? In the survey of industry, is he canvassing the views of industry as to a system of free depreciation instead of investment grants?
§ Mr. CarmichaelThe rate of investment grants will depend on the rate of applications. As to the question of desirability of investment grants and industry's views on them, this has been considered. We are keeping the C.B.I. informed on the study which is going on. The evidence by the Scottish C.B.I. is that it has no particular preference for investment grants as against investment allowances.
§ Mr. William HamiltonDoes my hon. Friend recognise that if the Tory threat of abolishing all investment grants is carried into effect this will have extremely serious effects on economic development in Scotland and other development areas?
§ Mr. CarmichaelThat is one thing which will come out in the study. It is interesting to note that the Opposition, when they were in power, did not investigate the effectiveness of investment allowances.
§ Sir K. JosephWill the hon. Gentleman acknowledge that the Opposition and his hon. Friend the Member for Middlesbrough, West (Dr. Bray) are in agreement that there are better ways than the present investment grant system of increasing employment in the development areas, mainly through the Local Employment Act?
§ Mr. CarmichaelThat is something which right hon. and hon. Gentlemen opposite have never proved. They did not make any investigation of the effectiveness of their system, and this is one of the things about which we hope the study will give us some evidence.